ADB sees Vietnam growing faster than forecast

By Dat Nguyen   December 10, 2019 | 11:15 pm PT
ADB sees Vietnam growing faster than forecast
Smartphone production seen in a factory in Hai Phong City, northern Vietnam. Photo by VnExpress/Tuan Hung.
The Asian Development Bank has revised Vietnam’s growth forecast this year from its earlier 6.8 percent to 6.9 percent thanks to strong momentum.

The forecast for next year too has been increased by a percentage point to 6.8 percent, the bank said in a release on Wednesday.

This is in contrast to Asia, for which it trimmed its forecast by 0.2 percentage points to 5.2 percent this year, due to persistent trade tensions and weakening domestic investment.

Vietnam achieved "unexpectedly strong" growth momentum in the third quarter, which could carry over into Q4, the ADB said.

Its GDP grew by 7.3 percent in Q3, dragging up the rate for the year-to-date to 7 percent, the highest for the period in the last nine years.

The strong growth was driven by the industrial sector, which even managed to offset a decline in growth in the agricultural sector, the Institute for Economic and Policy Research (VEPR) said in a recent report.

Growth was particularly strong in the mining sector, especially coal, it said.

But VEPR chief economist Pham The Anh said since growth this year depended heavily on exploitation of natural resources, the quality of growth has fallen, and Vietnam is facing environmental consequences like the recent increase in urban air pollution.

Experts have also warned that slowing exports could be a drag on GDP growth this year.

Economist Can Van Luc said: "Increasing trade tension and protectionism have had an impact on Vietnam’s exports. Vietnam should lower its growth target for next year to 6.5-6.7 percent."

The country targets 6.6-6.8 percent growth this year, following a decade-high 7.08 percent rate last year.

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